What’s Your Exit Strategy? One industry discussion / by Kerri
In order to sell your business on your own terms, you have to be proactive, get your house in order and make sure your financial records are in shape.
Today’s issue of Tire Review had this article, relevant to all small business owners asking the question: What’s Your Exit Strategy?.
He opened the article by saying: “I recently asked a friend in his late 50s about his plans for retirement. He told me he expected to die at his desk – and he was serious. He gave no thought to a time when he wouldn’t be in his business.”
This scenario the author described isn’t just true of his friend, but it’s true for over 90% of all baby-boomer business owners. Most business owners do not have an exit strategy. The risk increases the older you get without a plan.
“Part of being a proactive business owner requires that you look a few moves down the chessboard – whether that means keeping the business in the family, turning it over to a management team so you can golf more or selling the business.”
This article rightly highlights the impact of unprecedented industry consolidation. For any shop owner contemplating a future sale, even years down the road, he outlined a few things you should think about to get your business ready. For example, he talks about getting your house in order and the process of due diligence. These are strategic efforts which are essential to building value in your business to maximize your return. They are also important elements in a strong exit strategy.
I concur with this conclusion:
“The sale of a business does not always occur when or how business owners expected. In many instances, owners who gave little thought to a sale are approached by a potential buyer and suddenly, they’re in the game. In other instances, sales occur during times of desperation, when businesses are struggling.
Many people mistakenly believe they’re sitting on a gold mine. Sometimes they’re right, but more often they’re wrong.
Experience shows that valuation is not what tells people it’s time to sell; it’s what they feel in their heart that speaks to them. Until that time comes for you, be realistic about where your business is now and where you want it to be, and plan ahead. If it’s not time to say goodbye, look at how you can build up your business and preserve value.”
If you need help to start planning ahead and building your exit strategy, contact us or call 508.820.3322 for a free consultation.